Eaton Vance Management has launched the Eaton Vance International (Ireland) Parametric Global Defensive Equity Fund, a sub-fund of Eaton Vance International (Ireland) Funds.
The Fund currently has over USD200 million (USD) in commitments, of which over USD70 million (USD) was invested at the Fund’s inception in May 2017. The Fund is a registered UCITS fund, subject to regulation by the Central Bank of Ireland.
The Fund is managed by Eaton Vance Advisers (Ireland) Limited and the investment adviser is Parametric Portfolio Associates LLC (“Parametric”), a majority owned subsidiary of Eaton Vance Corp. The Fund’s portfolio managers are Jack Hansen (pictured), CFA, Chief Investment Officer, Thomas Lee, CFA, Managing Director – Investment Strategy and Research, and Alex Zweber, Portfolio Manager, of Parametric’s Minneapolis Investment Center.
The Fund seeks to provide a defensive equity exposure that is positioned to provide favourable absolute and risk-adjusted performance relative to the MSCI All Country World Total Return Net USD Index (MSCI ACWI Index), over the long term, and is designed to produce the strongest relative performance when the MSCI ACWI Index is experiencing negative returns. The fund aims to produce significantly lower return volatility and consistently favourable risk-adjusted returns compared to a fully-invested equity portfolio.
According to Hansen, “Given ongoing uncertainty in the global markets, we are pleased to offer clients a strategy that follows a disciplined and systematic process which is structured to deliver results in down and sideways markets. We believe this may help clients reduce the magnitude of drawdowns and recover faster from stress events.”
The Fund will seek to increase portfolio diversification at a lower cost than traditional alternative investments, without sacrificing liquidity. This is a particularly attractive strategy in the broader context of high uncertainty in the outlook for traditional asset classes.
The Fund will aim to achieve this diversification by capitalising on the tendency of implied volatility to exceed subsequent realised volatility. Through the systematic sale of equity index options, investors can harvest the Volatility Risk Premium (VRP) – a distinct and persistent return stream supported by academic research. This return stream can be accessed without the use of leverage.
